Jacko Law Group, PC
Call Today for a Consultation
San Diego 619-298-2880 San Francisco 415-766-3599 Los Angeles 213-631-2549

B-D Corner: More Disclosures and Filings Required For Private Placements

Last month, FINRA proposed Rule 5123 which, if adopted by the SEC, would have a huge impact on broker-dealers  that offer or sell any security conducted in reliance on an exemption from registration under the Securities Act (i.e., a private placement), or participate in the preparation of a PPM, term sheet or other disclosure document for a private placement.Proposed FINRA Rule 5123 would require broker-dealers and their representatives to provide a PPM or term sheet to each investor prior to the sale of a private placement. Such disclosure would be required to describe the anticipated use of the offering’s proceeds, the amount and type of the offering’s expenses, and the amount and type of compensation to be provided to sponsors, finders and consultants in connection with the private placement.  Proposed Rule 5123 would also require “notice” filings of broker-dealers’ private placement activities. Specifically, the proposed Rule would require broker-dealers to file with FINRA the PPM, term sheet or other disclosure document (including exhibits) with FINRA no later than 15 calendar days after the date of first sale, and to timely file any material amendments to such document.Notably, proposed Rule 5123 would exempt several types of private placements from the requirements noted above. Some of the Rule’s exemptions include private placements sold only to one or more of the following purchasers:
  • Institutional accounts;
  • Qualified purchasers;
  • Qualified institutional buyers; and
  • Investment companies.
As offerings sold exclusively to qualified purchasers are exempt, so-called 3(c)(7) funds would not have to comply with proposed Rule’s requirements.For additional information proposed FINRA Rule 5123, please contact Brent M. Cunningham, Associate Attorney by email at brent.cunningham@jackolg.com or by phone at (619) 298-2880.

No Comments

Leave a comment
Comment Information
Email Us For A Response

How Can We Help?

Email us to request more information or to schedule an appointment.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

San Diego Office
1350 Columbia Street
Suite 300
San Diego, CA 92101

Toll Free: 866-497-2298
Phone: 213-631-2549
Phone: 619-298-2880
Fax: 619-298-2882
Map & Directions

San Francisco Office
Four Embarcadero Center
Suite 1400
San Francisco, CA 94111

Phone: 213-631-2549
Phone: 415-766-3599
Fax: 619-298-2882
Map & Directions

Los Angeles Office
535 N. Brand Boulevard
Suite 279
Glendale, CA 91203

Phone: 213-631-2549
Fax: 619-298-2882
Map & Directions